The second question from chapter 1 is: politicians, political economists, business leaders, etc. always seem to emphasize costs when they are talking about programs they do not like, and they emphasize increased economic (employment) opportunities when they talk about programs they do like. But all increased employment costs someone money when employment is paid for, and all the expenditures of one person or group are income for the person or group it goes to. Purely from the standpoint of spending or saving money -- of money simply changing hands or not, which is the total of what such political or business arguments involve -- arguing that we need certain programs because they create jobs and that we ought not to fund certain jobs because they cost money is inconsistent or hypocritical, since the programs that create jobs also cost money and the ones that save money also cost jobs. There has to be more at issue. What is "that more"?

The answer is built into the question. From a purely financial viewpoint, creating jobs costs money; and saving money costs jobs, or at least causes cutbacks in earnings among those still working who would earn the money that is being saved. But this does not mean it does not matter from an economic standpoint what you decide about the programs in question. The question ought not to be simply one of political preference where legislators simply describe the programs they like (or that they think will benefit them politically at the next election) as creating jobs and those they do not like (or that will not benefit them politically at the next election) as costing money. If this is all legislators are doing, they are like the married couple who cannot agree about a purchase where the husband claims $600 for earrings is exorbitant, but a reasonable amount to spend on a set of golf clubs or a VCR, and the wife thinks just the reverse. In such a case, the issue is not one of extravagance or savings but one of priorities how to spend money.

However, more is involved with regard to government spending or cutbacks. There are more important aspects legislators ought to consider in these kinds of costs versus jobs issues: (1) is the return to the public worth the cost; that is, (a) is something worthwhile being done with this money, and (b) is it important enough to warrant the expenditure for this project at all. (2) Is it fair or otherwise reasonable to use tax money (or other public funds) for this project, or is there some other way that project could or should be paid for (say, by private means or some sort of private sector/government partnership). (3) Is the money being spent in the most useful or efficient way possible to secure the goal sought? (4) Is there not a more important way to spend or use that money, a way which also satisfies the first three criteria? (Obviously if there is a more important use for the money, it should take precedence over the use in question.)

Regarding 1a, obviously if the program is not worthwhile, it should not be started or continued.

Regarding 1b, if it is worthwhile, the question is whether it is important enough to do, or whether there are more important uses for that money (either by the government, or back in the hands of the citizens, or as surplus -- i.e., savings for anticipated future needs). For example, a community may want to construct bicycle paths that they know many people would use and enjoy, but if there are many elderly people who cannot get to their doctors or the grocery when they need to, or if there are people who cannot afford transportation to get to available jobs across town, some sort of public transportation service may be more important. Or if people feel taxes are too high, it may be arguable that if there are no more important needs than bicycle paths and not all that many people would use the paths, they ought to just refund the money to the taxpayers.

But suppose the project is worthwhile and important enough to do. That still does not mean it ought to be done by the government. If, in a (primarily) market economy, the market could support the project reasonably there is no reason to use public money to do it instead. This is for two reasons. First, if those who will benefit can amply afford the service, it would be unfair to make those who will not benefit from it to have to contribute to paying for it. There may be extenuating circumstances to the contrary, but they would need to be heard and weighed. In an economy where there is much government involvement with programs that help various groups, it might not be unfair in some cases to help a group that could pay its own way, if they have not benefitted previously by some projects primarily for them. For example, a community might set up a program for senior citizens, citizens who have contributed to others in the community and who could, if they chose to, set up such a program themselves, but at greater cost to themselves than for what the city could do it. That might be a reasonable and fair use of city resources. 

Second, in a (primarily) market economy, if a non-government worker could and would do the job and earn a satisfactory living from it, it is unfair to use part of his tax money to keep him from having the job because you give it to a government worker. Government should not use the tax revenues from private enterprise to compete against private enterprise. That is unfair. In the city where I live there is a public university that has a number of profitable enterprising programs on its campus. Many of those programs compete with private businesses in the city. I believe that is unfair. Without some specific extenuating circumstance, it is unfair for the university to use its prestige and privileges and the buildings and staff it pays for from tax dollars to compete against, and take business away from, the people who provide those tax dollars.

Unlike those who believe that government should provide services that they can do better than private enterprise, and unlike those who believe that government can do nothing better than private enterprise, I believe there is no necessary general difference between the quality or efficiency of government work and the work of private business. Some government employees are better than others; some private workers are better than others. Some government employees are very conscientious about money they spend; many are not. But that is also true in private business, particularly where the money being spent is not one's own but is simply money one manages for owners who individually have little say in the running of the business and who collectively do not have enough knowledge to know whether money is being spent most wisely or efficiently. The normal standard in profitable return is not whether it is the highest one could get, but whether it is one that is acceptable⁽¹⁾. The only point where a potentially higher return tends to be pursued is where the owners or managers know or believe that a higher return could be accomplished. That is difficult for most people to see just on the basis of theories or undemonstrated, intangible reasons. Seeking potential improvement by means of change --particularly when it involves significant change-- tends to be far less a goal of most people or organizations than is the goal of not getting too far behind others. It is easy for people to see when another company or government accomplishes more in the same field, and thereby demonstrates or proves (instead of just arguing) that a greater profit can occur. Merely rational arguments to the effect that change will bring measured improvement, tend to fall on deaf ears. The market only provides direct feedback as to whether a business is fit to survive (i.e., no survival without sufficient profit); it does not provide feedback about whether a business is profiting financially as well as it could be, so the market cannot serve to automatically weed out programs that are far less than ideal -- as long as they are simply good enough to survive. Judgment based on other sorts of evidence has to be used to do that, but that is true of all businesses that survive and of all jobs in those businesses. Profits do not by themselves show their cause or their potential limit. It is difficult to track down inefficiency in a complex organization simply by looking at profit margins of various departments, particularly the departments that do not obviously or immediately contribute to current financial profitability, e.g., research, or the pursuit of employee satisfaction. (Much of legitimate government work will not have feedback based on profitability because much government work deals with trying to insure fairness rather than productivity; and there are not physical signs of fairness in the way there are of productivity.)

To say that there is no necessary general difference between the quality or efficiency of government workers and workers in private industry is not to say there are not differences. It is always possible that there are pervasive rules in some particular government or agency or office that might tend to foster inefficiency or poor quality. But that is also true in any private company. What I am arguing is that there is no reason to believe that, without some specific cause, any government enterprise would necessarily be worse than a private enterprise simply because it is run by a government. I see no reason to believe that governments attracts more of their share of foolish, spendthrift, lazy, inept, or corrupt workers than private industry. When government programs fail, it is because of some specific flawed ideas, flawed programs, flawed goals, flawed work, flawed decisions or decision procedures, flawed management, flawed implementation or whatever, not because the program was a government one. When one private business fails where another one in the same environment succeeds, it is not because one was private and the other one was not; it is because one was run better, or had better luck, than the other. There will be some specific reason, not just the reason of private enterprise. Similarly, when one country wins a war against another, where the war is a total national effort on both sides, led by each side's government or government-funded military, the victory is not because one side was led by government and the other not, but because one side did it better or had more resources or more luck than the other. 

There is inefficient and inept government leadership; but there is also that kind of leadership in the private sector. Periodically there is good, successful government in the form of particular administrations or departments who know how to get good things done well. But governments, like any business of comparable size and scope, tend to become victims of inertia. Rigidity tends to replace flexibility; standardization tends to replace innovation. And acceptability tends to replace perfectability as a standard -- the tendency becomes to believe "if it works, (and if it sells,) it is good enough, so don't waste resources trying to improve it, especially radically, because it is unnecessary or because you might do more harm than good." And state and local governments, like many businesses tend to copy each other, so that not only is there little innovation and flexibility within a given government or business, there is little difference among governments or among businesses in the same industries.

Of course, standardized practices are good only in proportion to the value of the practice. If a policy is the best possible one, the more pervasive it is, the better; if it is a terrible policy, the less pervasive the better. Monopolistic and conformist oligopolistic practices are neither good nor bad in themselves, whether government or private. They are simply good when the practices are good; and bad when the practices are bad. As of this writing, it is difficult for me to believe that flexibility and innovation are no longer important in either government or business. I do not believe we have achieved all the success we need or could achieve. And I do not believe our present management and policy decision techniques are likely to be the best ones we could discover and employ. For example, it seems to me that both governments and businesses need to develop better methods of experimentation in order to safely and effectively test new ideas in products as well as services. Improvement, and experiments that test ideas for improvement in practical (and probably small scale) ways, should be the goals of large government and big essentially non-competing businesses as much as they are the goals of small businesses trying to get a substantial edge on each other. It should not take the success of a competitor that threatens one's livelihood or business altogether to spur organizations to improve.

One way a government might use its funds is what I call "seeding". Seeding is the term I use for an organization's using its resources to develop self-supporting (or minimally dependent) enterprises, rather than enterprises which need continuous funding in order to survive. It is the concept that it is better to promote self-sufficiency among those you feel responsible for than to continually have to provide them with what they need. As someone once said, it is better to teach a man how to farm and to provide him seeds one time than to have to keep giving him food that you cultivate and harvest yourself. Let me give one example of how I think not enough seeding is done.

In Birmingham, Alabama, a number of businesses, many of them large and influential, decided that the individual and piecemeal approach to giving money to the arts -- which they each believed was important to do -- was not the best way for them to contribute to the arts. They believed it was not always effective or even fair, since some artists or arts organizations might be able to get more money than necessary while others did not receive enough to survive. Also, it was costly for each business to have to deal with solicitors and to make reasonable decisions about the disbursement of money they wished to contribute. (To forestall Milton Friedman's objection that this is not a legitimate business of business, let me hypothesize that it is the collective desire of the owners, workers, and shareholders of all these enterprises that the arts should be supported and that doing so collectively brings a greater profit --in the sense of benefit, whether financial or otherwise--to everyone than anything they could individually purchase with their share of the money (as profit) donated to the arts.) So they organized an arts foundation to which they each contribute annually, to disburse the funds among artists and arts organizations vying for contributions. 

I believe this is not a substantially more effective or fairer way to spend such money; and it does not help make the arts more self-supporting or more profitable. Seeding would. If the money were used to, say, encourage and publicize the following kind of program, more businesses, artists, and the public would benefit. And they would benefit in a way fairer than the way the arts foundation distributes money -- which is by their view of the needs and by their selection of worthy grant proposals. If the money were used to get businesses to patronize artists in the following way, the arts, the business community, and the public would be better served: encourage businesses and government offices that are frequented by the public to display art by local artists that these artists loan on consignment to them in the hopes of selling. Businesses would benefit by having "free" decor (or music, or whatever); artists would benefit by having greater exposure to freely promote their work; and the public would benefit by having greater access to the work of more artists. 

Furthermore, if the program were promoted correctly, a greater number and a greater variety of artists, could have a chance for success, rather than the few lucky ones who receive the blessing of those who run the arts foundation. Large organizations, like a symphony orchestra, could be allocated money or resources to make recordings that could serve as a greater, and continuing, source of revenue, rather than have that money just serve as payment for ephemeral performances, thus making those performances more cost-effective and available to a wider audience. Such recordings do not need to be flawlessly superb, merely good enough for local consumption at a commensurately reasonable price. There would, of course, be details that need to be worked out, but the point is the goal of seeding and bringing the benefits to a wider audience, as opposed to continuous funding and dependency on that funding by a smaller percentage of beneficiaries than could be reached.

There is an old riddle. You have entered a cave seeking shelter. It is about to turn dark and very cold outside, and with just enough light left in the cave you come across the following objects: a candle, a torch, a kerosene lantern, kindling, and logs for a campfire. You have only one match. What should you light first? The answer, which is somewhat of a joke, is: the match. Few people get that answer because they take the question to really mean, which of the objects in the cave should you try to light first with your match. That is the reasonable way to take the question. And, of course, the way to figure out the answer is to figure out what will give you the most benefit from your resources, and particularly from the crucial resource -- the match. For example, the campfire is important to light, but trying to start a campfire with just a match is very difficult and probably would end up wasting your match, so that you would have nothing. If there is not a serious draft in the cave, the candle may be the easiest, safest thing to light first and the most useful thing to then use to light the lantern and the torch with, using the torch to light the kindling to light the campfire. The point here is that you want to use your resources whenever possible in a way that makes them grow and last as long as possible. The same is true with money and with labor. It ought to be particularly true with tax money or any money you use from other people on their behalf. 

Now many people would say that is the difference between consumption and investment, but I do not believe that is the proper distinction. No matter what you do in the above case you expend your match. (Or if you simply save it, you waste it altogether, since it is only useful when it burns.) The point is to expend it in the wisest way, in a way that is most likely to give the most reasonable or best return. So returning to the original question of whether to fund a particular program with tax money, let us assume that there are two possible uses of the tax money that meet requirements 1a, 1b, and 2; the project is important and warranted, and it is a fair use of taxpayer's money. But criteria 3 must still be met. The question is what is the real goal of the program and how can it best be met. Employment for its own sake --what critics of government "direct" jobs programs call "make-work" programs-- is hardly a legitimate reason, since any program will do that. As someone wrote, if that were the point of a program we could put everyone to work on one of two teams, those that dug holes that were not needed, and those that filled them back in as they were dug. If the government must employ people, taxpayers want them to be employed in ways that serve the most useful and important purpose possible. 

Some people say, for example, that the unemployed should at least be picking up litter on the highway. They should be doing something useful. But my criteria is that they should be doing the most useful work possible for them, and that may not mean simply picking up trash one piece at a time. It may even mean being paid to go to school. If a person, for example, in Texas is an out of work geological engineer, you want to be able to put him to work in a way that somehow uses, if not his specific training, at least his general education and general ability and intelligence in a way that gives us back the most for our money. To have him just picking up litter on the roadside is not likely the best he can do for us or for himself. So instead of spending the money to put him to work doing something that does not utilize his particular abilities, it might be more appropriate for the government to have a job re-training or re-locating or even just a job-finding service for people who do not have the resources to re-train for, find, or relocate to a new job. That would be far less expensive, and far less wasteful of this person as a resource, than employing him at some menial task until oil prices rise high enough for him to find a geological engineering job in Texas. 

That is, it would be less expensive for us if it were done properly, which is a concern -- since just having programs does not mean they are good programs or ones that get the most effective results. Many employment agencies whether government or private do enough work to get by (which may require a bit more in private business, but not that much more), filling the easiest jobs they can, but not going out of their way much to do much more. So if a geological engineer goes in for job placement, he may be told of a job available for a typist (though he may not type particularly well) or for an aide in an infant day-care center (which he may not have the temperament for or which someone with much less education could do well) and the "counselor" will feel they have "done their job". I assume there are better ways to do this.
 

If I am correct, government jobs should be ones that do work which is justifiably important, that cannot be done (sufficiently) by private enterprise, that are fair to have taxes or public funds (e.g., lottery funds) for, that meet their goals in the best possible way, and that are at least as important to have done as any other that would use that same money. I would now like to try to explain what kinds of work private enterprise in a free market cannot do or should not do, work that is then necessary for a government to -- or if not a government, at least some sort of joint venture, non-market enterprise, like the arts foundation mentioned earlier that was founded and funded by a large group of businesses acting in concert.

Markets essentially allow people to trade things they are willing to give up for things they want. Markets do not easily handle, if at all, five kinds of things: (1) what economists call "externalities" -- benefits or harms that are not part of the costs or profits of a transaction; "free rider" kinds of things such as when a neighbor fixes up his house or lets it deteriorate, it effects the value of your house, or when pollution that a factory does not pay to prevent, harms an environment downstream that the factory is not paying to clean up, or when people copy a book, compact disk, or computer software program instead of buying it. (2) things that are too big to be organized or paid for by just one person or small groups trying to trade among themselves individually, but which a great many people want or need and would be able and willing to contribute toward. Examples usually given are roads, schools, or armed forces for defense. (3) Appreciating the difference between what is desired and what is desirable, thus (a) allowing transactions to be carried out that are actually harmful or wrong in some way, even though the people involved directly in the transaction (think they) want them, and (b) allowing some good things not to happen because not enough people (believe they) want them or see the need for them. There are all kinds of both cases: buying and selling harmful products, cheating or defrauding people who have no way to know they are being cheated, losing long term benefits by reaping shorter term ones that are not as overall valuable, letting knowledge or skills be lost to future generations because a current generation may not appreciate them enough to help them survive, etc. (4) Maintaining an informative overview of the whole process, in particular helping keep track of needs, potentials, and possible problems or conflicts. This is in order to help people see a more global view than they may be able to see in their own niche. In the Rubic's cube analogy (Chapter 10, "The Invisible Hand Explained), it is to have someone who can point out and help coordinate, and fairly and rationally facilitate, the changes necessary which might be to everyone's ultimate advantage even though it necessitates someone's temporarily giving up their local advantage. (5) Having a mechanism to allow participation by those outside of any apparently self-sufficient market.

That a market is unable to do these things does not mean that a government as such needs to do them. For example, it was a group of business leaders who set up the arts foundation in Birmingham, not the city government. Or it might mean that there ought to be many boards or groups established to handle different problems, that we should not expect one body to be responsible for everything. Or some things may fall under these categories at one time, but not at another. For example, as mass multi-way communication and information becomes more readily available, it might become more feasible for people to band together to finance bigger projects privately. If someone thinks some project is worthwhile, he can announce it to many people and let those respond who would be interested in financing it. They do not all need to meet in the same place to be able to discuss an idea and come up with a plan. Say someone thinks a road needs to be built or widened. Enough people might think this is a worthwhile enough project to be able to finance it and make it pay off for themselves. Many firms hire their own security guards; groups of people may want to be able to hire their own actual police without having or using a city-wide police force. In this age of giant multi-national corporations, many of which are bigger than many country's governments, it is not clear the market will not someday be able meet the needs which are now too large for separated collections of individuals and small groups to meet. The problem of not realizing common interests or being able to arrange mutually beneficial programs may diminish as communication dramatically improves, uniting people by mutual interests rather than simply by geography. The problem of maintaining some sort of overview of the whole economic system (4, above) may also decrease or disappear as it is handled by private information-gathering and communications firms.

Problems (1), (3) and (5), however seem not to be problems for which the market by itself has (automatic) mechanisms to solve or resolve, although there are some attempts being made to understand and treat externalities in financial terms, and there are some attempts being made to prevent harmful activities by making them financially burdensome, treating harms as expensive business costs. In Chapter 22, "Quantifying Qualities of Value", I give reasons why I do not think it will be easy or even possible to treat externalities, such as the value of leisure time, in financial terms. But I also do not think certain kinds of other values can be reasonably treated economically. For example, consider the speed limit, and fines for speeding, through a school zone when children are present. Suppose the fine is $100. The fine is not what discourages most people from speeding; their own concern about hitting a child does. Of those who do not have that latter concern, if one is wealthy enough, and if there were no penalty for hitting a child other than a monetary fine, one might speed through the school zone. But we do not want to be in the position of implying it is all right for wealthy people to risk running over children, since they can pay for that risk; what we want is for people not to speed through school zones and put children at unwarranted risk. Similarly we do not want people to take harmful drugs or to rob people's homes or to commit murder. Penalizing them for such acts, whether financially or non-financially (jail, capital punishment, community service, etc.) is not as good as effectively preventing such acts in the first place. From a purely pragmatic psychological standpoint it seems to me that levying financial costs on wrongful behavior, as effective as that might be in some cases, is not the most effective deterrent, especially when the fines are in fixed fees, rather than being progressive in regard to assets. For example, when a jury awards a financial penalty in a civil wrongful death case, it should not mean to a company they now need to incorporate into the cost of their product that figure as the cost of fines for an expected amount of such wrongful deaths, essentially charging people for the chance to kill them. You don't want Ford, for example, making the cost/benefit determination that it is "better for them" to sell slightly defective cars because it will be cheaper for them to pay penalties for the expected number of wrongful deaths than it will be to make the cars safer. You want them to do the right thing, not the cheaper thing. And putting any dollar amount on a value always risks that to some person or some company some day that dollar amount won't really cost as much as the value actually means, especially after a long inflationary period which would then essentially deflate the worth of values.

I am not saying what things make for better actions and better social consciences; I am not sure. Experimentation in molding social consciousness, conscience, and conscientiousness probably would be helpful. It may be, for example, that promising any uncaring company the whole hour of scrutiny on something like CBS' "60 Minutes" may be a more meaningful threat than any particular fixed rate fine. It may be that criminal penalties might be more effective. It may be that particular kinds of commonly-held values courses need to be taught to all young children. I simply doubt, from the way (wealthy) people and (wealthy) companies have been known to flaunt laws when they could easily afford the fines, that fixed-rate fines by themselves are effective. Even just being put out of business may not be sufficient incentive to get people to do their work right, if the risk of being caught and penalized that way is not all that great.

One example of the effectiveness of government requirements at getting compliance, rather than just mere fines, was explained on the radio one day by a spokesperson for a highly competitive, but polluting industry. Everyone in the industry knew they were polluting and everyone knew also that their pollution could be cut drastically by installing expensive devices. They also knew that the costs of such devices could easily be passed on to the public, but only if all the competitors installed the devices, so that no one could gain a competitive price advantage by continuing to pollute and sell for less. They were all willing to install the devices, but only if they could be assured all the others would also. They essentially wanted the government to set pollution emission standards so that everyone had to comply.

Of course, governing organizations do not need to be government organizations. Many private organizations such as churches, community subdivisions, businesses, professions, industries, etc. have their own governing bodies which tell what kinds of transactions may be wrong or undesirable whether they are desired by two parties willing to transact them or not. What you want from governing bodies, whether governmental or not, is for them to set the right kinds of regulatory rules, not just any rules that may or may not work, or that may work, but in a way that is more harmful, unfair, burdensome, or unproductive than is necessary. You want regulations, like you want anything else in life, to be the least burdensome while being as effective as necessary, and as fair or otherwise right as possible. Unfortunately, there are two sides of the same coin that tend to jeopardize regulations being that way in the United States (apart from their being ineffective because "bad" industries were able to use influence to get water-downed regulations). Both have to do with laws being written too specifically, though for different reasons. First, some regulators tend to require a particular means to solve a problem instead of simply requiring companies to solve the problem in any legitimate way they can, which may be a way far less burdensome or costly than the means the regulators require. Second, we live in a society that follows the rule of law, not generally the rule of intent of a law (the exception being some higher court rulings). Laws do not always correctly say what they mean, or anticipate all possible way of compliance, and therefore allow "loopholes" that any rational person knows is a loophole, but that courts have to uphold. It might be helpful if laws and regulations were written both with a general intent as well as with specific language, and if, at least in the most obvious cases, people and companies could be held legally accountable for ignoring the intent of the law even if they complied with the letter of the law though clearly by means of a loophole. This may be problematic in some cases, but what we have now is problematic anyway. I think experimenting along the lines of writing overall policy goals and allowing flexibility to capture the intent of those goals would show whether this might be better or not.

Problem number (5) above occurs because networks can always form which are satisfactorily self-sufficient for those involved in them, and which then have no reason to take in more participants. As explained previously, this is obvious with regard to a wealthy country's existing next to a poor country, or wealthy and poor neighborhoods existing in the same city. Poor people, even with job skills may not have job opportunities if their services are not seen as needed. I was once turned down for a job one time by an honest manager who said: "You would be really good at this work; unfortunately I don't have a need for any more good people at this time." This kind of situation can face whole groups of people. And it becomes particularly problematic as invention and technology reduce the number of laborers required to meet particular needs. In a market economy if new "needs" do not appear, there is no incentive from within the market to incorporate those outside the system -- no way for them to earn money; and no way or incentive for the system to supply them with goods since they have no money to pay for them. 

And those on the outside, with sufficient skill to participate in the existing market have to displace others from their jobs or their earnings in order to join the system. They cannot simply add their skills to the market; they have to replace or partially replace someone in the market. For example, when women began to join the labor force in large numbers in the 1970's, they had to try to win jobs and portions of wages from men who wanted them, instead of being able to increase the output workers were producing. There was no market for such an increased output. This caused much male resentment and hostility. Minorities face the same problem. During World War II, when women went to work in the factories and stores, they were not taking jobs away from men. Men had to leave those jobs in order to serve in the armed forces. Essentially, war created new jobs for men while the war was being waged, and women filled the jobs left vacant by the men who served in the military. Women also filled newly created civilian jobs in the defense industry. When new needs are created that people in the self-sustaining market are willing to pay for (as they are in war), then the economy does expand to take in those outside it without thereby displacing someone already in the economy. When needs are not created that people already in a self-sustaining market are willing to pay for, than those outside the economy cannot enter it except by displacing someone inside.

The ideal is to see to it that everyone (who can and wants to) contributes to the whole pie that they can fairly and reasonably then share. The market can only do that when workers are obviously needed; it does not do it when workers are not obviously needed. And they are not obviously needed when output is sufficient to satisfy everyone already involved in the system. In such a case, something external to the market is necessary to try to use otherwise unemployed labor outside the system to meet otherwise unmet needs of those involuntarily outside the system -- especially when system inclusion is virtually necessary for decent quality of life (as in an interdependent society).

It seems to me that regarding economics, an interdependent society (whether through government or otherwise) in a market economy needs to try to make the following occur, whether through the market, or external to it:

• 1) Everyone understands that the work ethic is expected and desired -- that to receive distribution from the market, one must contribute to it if one is able.
• 2) Participation is not closed to anyone and that reasonable jobs are available for people who need them; and promote the understanding that "greater participation in the system ought to bring about greater benefits for everyone (when those benefits are shared fairly)". This should apply as well to those who lose jobs through no fault of their own due to such things as unforeseen inventions, discoveries, or shifts in needs or fashion.
• 3) Establish reasonable fairness guidelines so that people cannot be cheated, gouged, or taken advantage of for the profit of others. And try to promote the understanding that satisfying one's (economic) self-interest at the expense of others is not as desirable as satisfying one's (economic) self-interest due to benefitting others. 
• 4) Set the limits of what activities will be (legally) allowed in the market. 
• 5) Recognize that money is not the only value and that many values cannot be translated into monetary amounts. Try to prevent or ameliorate policies which erode this understanding.
• 6) Devise ways to fairly and reasonably pay for or distribute "externalities", so that good externalities can be increased and bad ones decreased instead of having market forces causing just the opposite.
• 7) Monitor, and make available, as much as possible some sort of overall view of current and likely future economic (benefit/burden) conditions, not so much in terms of financial or monetary factors (which can be misleading or unhelpful), but in terms of quality of life factors, particularly trying to insure against, or at least inform sufficiently to help minimize, the co-existence of unmet needs and underemployed resources that could meet those needs. Simultaneously, try to prevent or provide information to help prevent the over-employment (i.e., squandering or abuse) of important resources for unnecessary uses.

1. The Jim Gray/Pete Rose situation and how it was handled brings together this point with others made in this book. NBC sports reporter Gray angered many baseball fans and viewers when he persisted in badgering Rose to confess to his alleged gambling just after the ceremony that allowed Rose to return to a Major League Baseball field for the first time in 10 years, when he and other baseball greats were introduced as the fans' choice for the best players of the 20^th century. Fans called NBC to protest; and the protest was enough that it was reported on the news and made Gray have to give an on-air response. The New York Yankees, who were sweeping the World Series from the Atlanta Braves refused to talk with Gray after the third game except, in a public rebuke to his face while he was on camera, to tell him they would not speak with him because of the way he had treated Rose. But the next night, the Yankees not only spoke with Gray on camera, they had to accept the World Series Championship trophy from him on NBC after they won the final game. 

It is not unreasonable to suspect that NBC executives "reminded" Major League Baseball how much money they contributed to the coffers that allowed baseball to be the lucrative profession it is, and that the league reminded the players of that. Without television, baseball players would earn far less because viewing baseball could not be "mass produced". There is a profitable partnership among the networks, sponsors, players and league. It is further not unreasonable to suspect that executives at NBC sports were angered by the Yankees' position and felt themselves to be, probably justifiably, in a superior enough position with sufficient sponsors and sufficient viewers to be able to ignore the moral outrage of the fans and Yankees. 

The point is that as long as there is sufficient profit believed to be obtainable for a sufficient amount of time, the executives in charge would not need to take into account fans' and players' wishes if they themselves do not agree with them or care about the incident. Since there will be no public election, as there would be in government, to serve as a referendum on their judgment and behavior, and since no meaningful backlash among sponsors or viewers is likely to result because there is no feasible way to organize it, the network can disregard the wishes of however many people may be upset with their actions. Even if this kind of behavior ultimately costs network television dearly as people eventually tire of it and as alternative forms of entertainment become more prolific, there is no financial incentive for the particular executives to care. Even in government, leaders can afford to anger certain constituents over some issue as long as they do not alienate them on sufficient other issues to lose their vote. In either government or business, those who make decisions do not need to consider the concerns of those they do not believe can impact their own personal positions, even if that is a majority of people (as long as the majority is not believed able to be organized to respond in a meaningful way).  (Return to text.)